SWN - Earnings call transcript Q2 2018 | Southwestern Energy Company

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Operator

Good morning, ladies and gentlemen and thank you for standing by. Welcome to the Southwestern Energy Second Quarter 2018 Earnings Call. In the interest of time, please limit yourself to two questions. Afterward, you may feel free to re-queue for additional questions.

As a reminder, this conference is being recorded. the to turn now will call Ms. over I President Relations. Penchas, Southwestern Investor Vice Energy's Paige of

begin. may You

Paige Penchas

Thank you, morning XXXX Chad. Good earnings second Southwestern call. quarter Energy's and welcome to

Investor Officer; Way, Joining for are Officer, the section financial XXXX. Yesterday and Relations of XX, Julian President afternoon, Clay Head Financial Carrell, The Kurtz, quarter-ended available and and Bott, me June website Chief Chief Bill on our release results Chief at Marketing today Jason Southwestern Officer; Operating released the Executive of is Transportation. Energy www.swn.com.

has for this posted XX-Q Our website. quarter been on our

will in We updated an post investor the coming presentation days.

Many started, get these control our are are we of of statements the are the discussed point during and detail and in section Securities statements in I'd and Before our outcomes. and out filings factors forward-looking that annual and many the quarterly of like Exchange to the Commission. forward-looking risks risk that beyond call this involve more comments affecting with uncertainties

we and or being with Although periods of our actual from any alternatives expressed and impact reasonable respect peers. on with facilitate We materially. performance future not some based across results they comparisons potential are are financial Fayetteville to measures may comments assumptions, shale non-GAAP today guarantees differ strategic All also exclude the to assets. may pursued developments believe expectations refer which help

measure corresponding call on any be a our non-GAAP nearest the Way. now to in GAAP I'll turn Bill over can For our measures use, release website. we found the to earnings available reconciliation

William J. Way

reposition by exceptional on continue Energy a company Today, to price I and across in low from our to and team to commodity the call. of Paige. compete Southwestern determined our who want results conference Thank professionals environment. about everyone you, Good and strategy execute quarter welcome morning, to win deliberate to our talk delivered the second

increasing capturing long-term our value portfolio of and our return key assets. and return-focused high to Our highest from returns scale We're from quality, liquids in strategy deliver concentrated areas value. assets value that improving large ever Appalachia drive targets five base area. driving our production We're growing

transportation leading portfolio value a volatile commodity Our market. maximizes in

We are value-creating cash the adamant in in we highest within projects and all capital flow. invest our portfolio returns-focused about allocation,

resource We on capital to deepen inventory. and our are philosophy expanding natural a efficiency gas, making we continuous portion liquids, basis, robust increases a we protecting on leading gains increasing have to technical and in flows efficiency leveraging through margin excellent execution. for and our And capture focused And maximize operational are retaining our cash prices. and hedging of our while exposure strong to capabilities commodity operating

while we impact production In XXXX progresses, continue from reshape liquids we reported by the improved cash an flow NGL driven oil of second increase margins to in all the realized higher above company. and levels prior-year As quarter, the and high benefiting pricing.

benefit year-over-year. X.X continue the the initiative alone this even equivalent Bcf our and took assets EBITDA savings $XXX interest of savings record million or for and growth Appalachia million costs including liquids annualized $XXX total savings. production XXX reported remainder and year production in of total per We which G&A of day XX% includes grow Bcfe of months during on generated over Appalachia to to Our previously We XXXX. over further with first in six action quarter $XX announced costs of reduce a the million through

will on and improving performance. liquids per guidance well barrels day XX,XXX and this Clay this details to XXX XXX guidance, high the provide quality reflects no increase to that include quarterly high operational of which capital production result, in guidance raising we with above guidance. of our as underlie assets. And is factors end Our Important Bcfe are full-year execution of strength production, raise the Appalachia shortly. a

track on plan requirements in our invest discipline. we environment and capital excess capital XXXX above within remain our financial expect flow our exercise the momentum clearly to and we pricing modest to original loaded cash assets Our deliberately generate guidance. current front Further, of capital which activity demonstrates

Our improve fractionation ample we growth results. continues to economics and processing NGL deliver forward our to planned have liquids capacity and focus on and further current

our investing flow unchanged. We generated strategically over are discipline. with strategic plus clear reiterate, discussion within capital all structure turned multiple are future to Fayetteville's for operations, finally, And before commentary remains financial while liquids additional capacity objective while guidance, maintain we counter-parties flow maximize our from and around process long-term working reaffirming guidance to production the raising to to takeaway with cash propane consistent I growth, our Clay, accommodate price, To continuing assurance.

we've and process. We consistently As the believe not interest of the to want additional this speculate outcomes. to details of in protect remains or on our integrity clearly discuss it shareholders future communicated, best we

completed. let is process will We know the you when

Now, it operations turn let me over for Clay highlights. to some

Clayton A. Carrell

building and quarter above Thank second the of we production. webcast. production Operationally, we day in guidance a high you, XXX Bill, strong is call and quarter. of had end which included liquids established the and per the Bcfe, first everyone barrels the to morning momentum on good Total on was XX,XXX

to our it our results. improve performance, and continue up operational We and efficiencies showed well in

us wells program the and XX% increased in by quarter me in per we originally provide cost the cost from second to which placed our with water activity area. see by full to per installation the the facility previously which a half pumped In our of of at allowed realize to quick early front-end planned eight of completion wells the on quarter, Appalachia project, and number will to track XX $XXX,XXX wells sales. the Let day I'll improvements more activity in summary during Tioga XX% we XXXX. the the to nine be reduced than loaded XX of now a asset of bring compared to quarter, year. complete infrastructure the second sales quarter more capital you Northeast announced quarter, the is for We reduction began the Appalachia give in in couple for in Appalachia, These them benefits benefit completed times the and coupled update Southwest an cycle examples. we third time stages well. Late

seeing million per performance production optimize the lateral the the day well are highest average we A a initial second has is grown have to in completion increase seen in of at The per feet improvements the feet end well XX% performance rate the per two-well continued day XX Tioga. Tioga cubic pad our cubic had per in we to day, area. increase recent gross continued XX XXX approximately of XXXX attributed pad compared Additionally, feet in to initial placement. production development at and June quarter. million Total area the designs effort from cubic to million

also Appalachia, the approximately area. improved all to the sales, expand We core XX,XXX well by incremental adds agreement Through cost. up net In Tioga of gas locations we XX,XXX The drilling Southwest our lengths directly future feet, to extend area and which to no position, able results operated agreement the joint inventory wells in acreage future economics. executing total a agreement development leasing, to in drilling at to execution core firm approximately lateral our us and enhanced we XX with allows existing strategic in Tioga were rich this our adjacent development land acres. private in to a which XX placed joint

including wells two XX% the highest producing of NGL total led condensate liquids, are and the cubic XX% per a liquids with XX.X equivalent the online feet ago. on after of two-well of the per million X,XXX condensate XX in focus to quarter, has day, continued some proving was production, approximately development early placed day, and Our barrels both XX%, of to and year producers compared be growth A XX% days growth condensate pad condensate basin. of in to

feet our during depth We We ago, Southwest also producing testing wells. less first cubic early later planned Appalachia by XX quarter. it inventory sales line month with the drilling Marcellus to is added We're year. Upper for of well than liquids-rich performance liquids, to well this million and a which our in our the with the equivalent per is further and Devonian have encouraged day the production placed XX% of

trades accelerate higher accelerate value data operational additional while has quarter. helps our minimizing Our capital to areas. the Point completed This approach trades capital to via liquids been understanding in technical Pleasant to allocate the and Upper we and can investment, learnings rich we so

in associated Lastly, increase this in landing the year. continues to we project be We the the the of the spend well two to flow wells advanced with be to expect predicted drilling of along two year. wells Southwest wells cash by and rigs showing and online to offset in progress designs with continue Appalachia improvements project zones. compared continues frac mid-April. a it water will end operational to half quarter redevelopment are XX% company. the targeted capital Fayetteville XX% optimize initial four second placed deliver and the crews. the running completion production which to to majority of We second the three validate recovery The utilizing ended and by These EUR the

fourth two the about crews think the we quarter. year, in will reduce we two rigs to As half frac and second of the

year. completion plan. for to of Bill high As time with profile of be is activity But the the mentioned, a toward as our our original expect improvements, this consistent guidance we result cycle the end count

done. more turn are amount quarter. same to now we So, the of it I'll to capital performance and the Julian getting discuss investing in the business over

Julian Mark Bott

performance morning. the flow Any very good environment, operational bank cash momentum current quarter's used this to we Clay, rest year. operating our expect will we had contributing the be our forecast all reduce Thank under In investments. will to and facility. our good of from exceed to continue the you, that capital a borrowings and excess We cash assets quarter, pricing

driven cash XX% last the higher production of liquid and million realized $XXX flow increase were $XXX strong prices. XX% adjusted an of quarter, These increases and we liquids million, year. For generated EBITDA by primarily and of above

$XXX For million cash to adjusted contributed EBITDA flow like EBITDA the margins. we $XXX Fayetteville about Appalachia $XXX and million. contributed first I'd talk briefly adjusted six and of million. Midstream million of months, to E&P and $XXX generated

year realized Appalachia $X Our for Mcfe per months. quarter, Southwest Appalachia basis. division from the the per first the Mcf average reflects an a per six last Southwest over XX% uplift Mcfe pricing of period for $X.XX a $X.XX liquids weighted on and during of of same price the The of generated increase margin

with improvement pipelines interruptions despite quarter, go caused result of improve margins consistent $X.XX Northeast $XXX in multiple our $X.XX XX,XXX capital per a day guidance XX% is we for loaded production of above quarter is on Our revised navigated liquids was for program. including In of be of average To in the barrels invest Appalachia first This Mcf Northeast reaffirm, Appalachia first differentials. and which as will million billion to successfully higher per year, region year, production team planned front-end the flow. within our into XX% we within pipeline, by in half the cash XXXX. primarily second our continuing In full-year approximately XXXX. the basis marketing six than to same original disruptions in the invested per full for will Northeast Mcf the billion were $X.XX was capital more capital which a the $X.XX all service. expenditures, maintenance guidance months,

mentioned, Clay to to for have of but half, contributed the activity the rest the actions in second operationally our outlook positive more our taken production reduce already As year. – more will

XXX to Our new XXX production of Bcfe production. for guidance Appalachian range

XX% a represents this growth XX%. and of to guidance midpoint, at growth original year-over-year compares Looking

increase Appalachia Our day average XX guidance coming in the liquids due with than consistent higher X% operational annual improvements. production represents higher is from more and were well change Appalachia Southwest guidance Bcfe our fourth no is the without barrels in XX,XXX additional corresponding XX% cost to capital quarter. improvements with which guidance. and in to guidance growth on gathering for a achieved system per a capital efficiencies outperformance, liquids These year-over-year Northeast is

credit our Lastly, of and our net of liquidity position revolving letters billion borrowings under available credit. approximately facility remains $X.X strong with

at times remained Our comments times essentially X.X begin Chad and concludes second our compared X.X to leverage the quarter-over-quarter at like end That to debt-to-EBITDA quarter of it to the back year. last session. turn ratio flat to the I'd Q&A

Operator

And, you. thank

session. question-and-answer our conducting be now will We

first Meade Charles Johnson The Please will go come with Rice. question from ahead.

Charles A. Meade

Good team Bill, there. you your to morning, and

William J. Way

Charles. Good morning,

Charles A. Meade

bit what and some it that. you more like, looks back to half Bill, little XXXX already share. indications it XXXX willing on gave any activity But detail see guys wanted for if level I holds I explore appreciate of that be you'd and a to the

of of that heard kind and maintenance So are year. of in case kind and of you will the in the you stay if to to that sometime that right, frac year? down run back half Fayetteville I you in crews, two that be a want part consistent of being guys sale Do going level a rigs level what the anticipate this two where with is the back you

Clayton A. Carrell

two this of correct You're is and – at frac fourth the – Clay quarter. part rigs crews the the two latter on

our Appalachia. talked there's characteristic haven't plans, in a that We move completed new typically we is but us ramp to budget we've XXXX years about heavily be past is and I up budget year and as focused in expect the into the as

Charles A. Meade

little Fayetteville by there There helpful – a then could talking I not profile Fayetteville of maybe between recently about if bit. educate around the and transacted the comments about differences little Fayetteville they're two? was Bill, the those a a – and be but their but assets want same you of sale assets help are That's Clay. the obviously another respectful And it. of recent talk firm recent you of wonder versus – field Got those was detail, us I the what can market sale, the maybe to your bit important in and the in your profile assets a that what same

William J. Way

Yeah, lot. Charles. question the I respect a

said, time. once on at Process everybody Fayetteville comment we'll going anything concluded to to As I've related is this and that, know. we ongoing we're let have not

And so, me leave just it there. let

Charles A. Meade

Okay. Bill. Thanks,

Operator

go will question Riley from Please next Rehan B. The Rashid come with FBR. ahead.

Rehan A. Rashid

Morning.

XXXX. million you the this savings I in the Just up of then you recap got anything of you want to of from? XXXX? in of beginning show $XXX see could The couple if And benefits sources, that questions. kind confirm just where savings the all please will a Did breakdown for we the could us year?

Julian Mark Bott

Sure. This is Julian.

capital about because already also the us when million and ratings Of million, we from upgrade from So have the agencies from costs got benefit associated been the from two the with efficiency will see steps is we the both did taken. $XX actually, the second those $XXX financing gave letters quarter. improving we rid the that that have ratings the revolver in which costs. we assurance state our as showing. There end of happened, had get those of as million, starts so of and ability the of credit are remainder, Those that and to at force very credit was Then ongoing some steps. $XX reduction far a the the

as the second quarter So but year. those numbers, move you the in through start effect didn't seeing see or you it results we of that the coming

Rehan A. Rashid

Okay.

Okay. you. Thank

the as in into is we proportion to Meaning, shift XXXX room the more capital, versus between you XXXX Southwest? spend and for there area side the than as XXXX? oil the how Northeast of margins, operational versus gas and shift a Northeast of on liquids-rich can the liquids whatever Northeast, about you what margin today the more much for and or have as you kind think about On think Appalachias, you Southwest, kind margins practical more XXXX,

William J. Way

Yeah. Bill. This is

or we we pricing of put area, (XX:XX). that set the up the we we frac our rigs, virtually done at can We as we conclude as year. have own our fly we planning We our back We'll contracts and out happen look – And flexibility a one and shift on a working own broaden that's will as can take forth. plates either the we we the have historically, budget in given can basin, and the later process shift the Appalachia as move fact budget wells.

we area, and So continue portfolio, we'll as we so. manage as manage do a that to

a there's lot flexibility of So there.

Rehan A. Rashid

what XXXX for Real and Thanks. for goals your quick second would two be of top for Perfect. XXXX? half operational Clay, Thank you.

Clayton A. Carrell

better I out us to to to We've subsurface make important completing operational continue how continue continue and to made room there's is but get equally them. continue great improvements. continue then efficiency Clearly, to Sure. think And strides advance wells for to that we're profiles we performance, that. the improve the we of production that

Rehan A. Rashid

you. Thank

Operator

question Carver come Marshall go Please from with Energy Our will ahead. Heikkinen next Advisors.

Marshall Hampton Carver

Yes. Good morning.

cost you liquids question, Appalachia dry in in system be you condensate have area expect or areas? your place, a where do well your to Just after versus more rich by water

William J. Way

those per Sure. That benefit running, vary Southwest, in in Northeast in App, water we down on talked about those but of and upon a benefit of both feel well foot $XXX,XXX lateral type get performance we'll those systems per comfortable get wells. of $XXX per range $XXX,XXX and we've length, – dependent that the will and fully all when well up we the

Marshall Hampton Carver

Okay. that applies a Northeast and And in $XXX foot both Southwest?

William J. Way

Yes.

Marshall Hampton Carver

Thank you. right. All

Operator

Securities. Michael question next McAllister from come with MUFG The will

Michael McAllister

about in guys. $XXX flows, Thank Is address or comment Good million? to the that was cash the taking the question. my flows, free release press facility. you There using cash the credit morning, for about

Julian Mark Bott

XX-Q, In $XXX Yeah. That's right. it the was million.

Michael McAllister

for you of kind a North of Star with, million, want, there sorry. where you feel XXXX? is how kind $XXX and you working dictate Is of like the I'm that that that approach does you level comfortable

Julian Mark Bott

We're mean, Clearly, I ample I million the $X we room have that. flow $XXX of under expect level. a living limits it. cash don't upper billion push facility. ever we mean, a so is to within it's comfortable look,

I that's when on rather than cash cash is flow, balance think that about reduce carrying you're the it just just living comment debt. sheet the within the the efficient

Clayton A. Carrell

me And that. add to let

on part cash budget depending of then picture that clearer the lock little like. we the year. is and later We as of what next put to of the capital and what forward that of the year adjust then projection the together our bit investments So a looks basis a like flow on curve looks number for dynamic we year, in into on first get that timing part

and the pull. investing cash we flow be that'll lever run, we within so, And how is

Michael McAllister

enough. Fair Okay.

your idea that the the kind to, of you that. for it's question, my better – financial with the kind like so, balance on thank the on of cash what feel and, I sheet, think answered of barometer about of that guys comfortable the comment you end

Clayton A. Carrell

Sure.

Michael McAllister

dealing another the that basically Can and just that you've changed and made inventory you question with these gave any has that guidance year have decisions I regions for the earlier in DUC the with today?

William J. Way

We're XX full of to track still XX on our with guidance wells. range year

Michael McAllister

All Thank you. Fantastic. right. Great.

Clayton A. Carrell

Yeah.

Operator

Please question Parks The Noel from go Institutional. Coker with next Palmer be will ahead.

Clayton A. Carrell

Noel?

Noel Parks

you Can me? yes. hear Oh,

Clayton A. Carrell

Go Yes. ahead.

Noel Parks

on And you returns I and Say, if about wondering redevelopment any what was like in projects curious that. Great. just Fayetteville of are results the also the you had just sense had I the was plate of equally all are sort for pattern, drilled, it candidates completed? the good with or on vintages wells how legacy depend sort wondering were they they in the of of development were redevelopment does when

Clayton A. Carrell

I'll Clay. There's benefit all Yeah. are, that is them and from take This completion landing lot the latest latest a technology. that. of zone

remember, that technology the that existing are maybe and we we're with a you they how that drilling that And stayed we are in analytics now is how of there's long vintage that a variability more then the area, one little at it were books opportunities. of data mix much there that wells those what But that has the our on are how they completed, current wells have lateral If offsetting when, we're the producers. the for using to look of was, zone. were, high-grade DUCs well able

just on three (XX:XX) a little in they're wells Appalachia said As got doesn't from with that that little asset our attractive. which economics. the PBI a over It in we've X.X, X.X our standpoint, and more a And range consistent compete expectations. we with the production are tracking is previous call, history

Noel Parks

Got you.

with achieve Okay. mean, any compared you implications I assumptions? redevelop, you there as density And can are for previous either

Clayton A. Carrell

do limit, it's wells comfortable offsetting Where produced that are where seen wells doing full putting in that the things how When normal we're in existing haven't pattern, the part those spacing well tighter the frac of redevelopment past. offset we're in But an the with getting is well we has communication we're pattern. the we the and spacing producer. we legacy over to to new that

that well. So you're twining almost

door in a did than to contacting we and it, rock first new getting next better go-round. in one, drilling a the You're way

Noel Parks

a Thanks Great. lot.

Operator

Please Company. Dardar Pickering, question Tudor, Holt ahead. come & will next The go from Jamaal with

Jamaal Dejon Dardar

Good Thanks morning, taking for my everyone. call.

Tioga rapid quarters. has region over last seen into County the bit a wanted Just to more here. dive This improvements several

Lycoming is a leg disclosed Just is kind the out a in acreage of sense of the most XX,XXX-acre this wanted upside get you would to future? what on percentage of include or count? County as does that of And de-risked, that potential well, say of also

Clayton A. Carrell

in that. the majority way two call our on most generally touch County. with we we the advanced. feel as of We're of good fully say seeing area, I'll includes each There's Lycoming on really is that those our up. of majority proving But XX,XXX, direction, not pad and well the northern I reaches maybe would we're that Tioga Sure. a it that it going bring of We it's that of some better whole about. all of but right of on. overall, to new It are area performance the that the combination counties.

Jamaal Dejon Dardar

All and the right. pretty And comments, seemed Upper well. That as promising that new good. sounds Devonian

Just get kind prize wanted for of wanted Marcellus. it but the is horizon a to also and if with just needed the size within and the liquids-rich of additional locations may of there to be that sense co-development get early, a granted sense,

Clayton A. Carrell

Yeah.

the is liquids-rich that has what compelling early you talked right and XX and the XP the with We've mentioned, the about about of before So, this It potential part And do in I comment. intrigued with a in we're (XX:XX) of as co-development around days nature now, agree Upper to to your it. We're is the there. That's environment. seeing XXs early. It Devonian is possibility. is price excited kind commodity of range.

so seeing right And continued the but scratching on surface of far. had our we've continued focus like what the now, and we're progression inventory, we so we're

Jamaal Dejon Dardar

a Thanks lot right. All everybody.

Operator

with ahead. comes Campbell Please Brothers. question Jeffrey go from next Tuohy The

Jeffrey Campbell

Good morning.

Clayton A. Carrell

morning. Good

Jeffrey Campbell

decline of the recompletions to to you you the just in the to some two active Fayetteville about or drilling rate and in your the the doing until as ask to you question still go Fayetteville? continue One, you mainly things. back the wanted doing to decline the again process, reach are end I recompletions optimize manage are Fayetteville you

William J. Way

and program. are about wells that talks The Clay Yeah. of all part a redevelopment test

program own the, them. capital decline focus While the SWN the of and economic on allocation them we under of are vast majority the But capital working anything assets constantly focuses our we highest Appalachia model for returns capital own or our to to (XX:XX) improve our PVI Basin changes any where rates operate or Fayetteville and are of in area, ongoing the But basis. improve or the is. activity gas doing really that and our on continuously teams asset any around because in an that's work to is

Jeffrey Campbell

Okay. that And eventually to is in some of program learning take a that Fayetteville, a they just, to in the whenever appropriate that follow-up Appalachia would so at you're look applicable that... portion, these things it's be to legacy

William J. Way

Absolutely and...

Jeffrey Campbell

future? ...at some the in point

William J. Way

we of And things cycle. doing really great Absolutely. one accelerated the is we've we're have, the learning

in an and the it one in of rest. try we we part our as So company opportunity apply

have So we'll Appalachian the stages information of division out the some doing around we're already there. in But planning parts both bring of opportunities shortly. that and that

Jeffrey Campbell

typically being means just a ask foot that mean, up I everything And could you JV, drill talked end split some you JV can so about quick Right. really of put are you a guys them. question about. with Does it XX%/XX% laterals your partners, you acreage after pairing imagining XX%/XX% together? if the I those XX,XXX I'm

William J. Way

maximizing this it we we'll as the obviously, No. we're It and be value ventures for doesn't. mean, both of we're go out operating I forward.

that that the have. than under did agreements we any more we we So not, disclose details didn't

Jeffrey Campbell

I you. appreciate Thank helpful. That's it.

Operator

from next Piper ahead. go Kashy Our Jaffray. with Please Harrison comes question

Kashy Harrison

taking questions. for thanks and everyone, my morning, Good

it ability efficiency is there's infrastructure year. I capital of amount capital a across good So this better mean, happening to coming production next once even deliver online, on despite your invested. the project and, it's certainly of to given going lot financials just And like same the get water work operationally comes looks higher

could in So in I expanding put the was you everything just as so, rate all of inventory efficiencies, everything the portfolio, the gas your closer get environment? we And seeing sub a improvements, quantity what the you're a year-end like, wondering, economic in is look season? rough of $X of give all to when together, if us sense inventory reserve change you can that

Clayton A. Carrell

Yeah.

So operational say our would improving efficiencies these and progression what the on and the improving is focusing and that EURs. by of we're I rates higher all production economics inventory

As Appalachia clearly the better. ways to rich it working and in in and already inventory, we're our inventory relates is highly economic make it inventory, lean already to progressing Southwest our on

keep and we've Tioga move As the UPP, the In to more inventory into and App, those opportunities and Upper that there's where sub it similar type that. focused where progressing understanding Northeast Devonian are The on is relates longer activities. are those and to portfolio and breakeven both we the and continuing on locations are drilling is into new example $X economics, them bringing below to them shared today teams work that. mark, of which making $X is improving we're helping which actively lowering the the

William J. Way

first that, Southwestern gas be, in are of Yeah. things is of color differentials this environment current one would to our the of are one improved. to terrific prices And down, that comments for a while add happening couple is

markets, when you if Number down. as access to do we prices one. at, NYMEX be our have And are able prices on a to the breakeven realized and so, And basis, the look two, That'd to that come up happen. breadth. our the portfolio enable we're transportation are to this you expand trying going

about ventures area talked Appalachia, PA, $X.XX Northeast we we adding depth. talked dependent Southwest we're than to the inventory. on about And liquids have you prices. (XX:XX) the less in So And in in like rich

as than capture (XX:XX) some improvements, in better breakeven even these around of that. drive to the And happen of And $X.XX quite a and we PA, right changes opportunity bit we're have so, terms just that of for In all we the Northeast down area further. that.

everything to do to fine environment, so, be and a can And continue results. we quartile deliver sub-$X. our to we drives some In repositioning sub-$X top

Kashy Harrison

separate excellent of then largely Thanks. for several more have more color That's question, flows. less Bill, or in years nature. sort now, you a maybe there. And strategic invested within cash

transitioning amount were either variable to that flow the on your are a or sort flat some wondering, the of sheet producing breaking was it companies longer to be apply a what term. glass the of of just in strategy potentially so. in to thoughts to just cash could XXXX get year-on-year, pay And I Just on potential used one trying do dividend? your and thoughts XXXX balance to You significant earlier free to just production but shift keeping or

William J. Way

at cash Yeah. around invest, we, investing rate options we not the we we'll at a the look do when and So those and think Do value; do we within put to options plan, then like commodity we I question that. slow flow, like, you've what all the needs look look your we of look are? of has down plan context three pace look just down? always got cash put pay we than the debt? to first, Do public cash more be, further think we as prices at to XXXX And drill the at flow company, what to invest to outside and too, them, as Do together. I back but to it our optimize continue do it at

Kashy Harrison

Thank right. you. All That's it me. for

William J. Way

Sure.

Operator

ahead. go Bank Doug from Please with comes Merrill question next of Lynch. The America Leggate

John H. Abbott

like another he is call. to on morning. Leggate. Abbott for Good Doug It This just John looks hopped on

relates Appalachia first drilling Our (XX:XX). $X.XX at to your question inventory Southwest

locations, you've XXX wet window. about have You the and gas in said, lean

your Southwest that think current When far that run can maintain provided how lengths about you You've locations rate, you years think XXXX do you those be post-XXXX? many X,XXX for that XXX guidance lateral could assuming Appalachia, so us with feet. in

Clayton A. Carrell

drilling going about, wells it's be to think I for we've completing year. the Yeah, full been the,

that. is Southwest App in around somewhere XX wells, like XXXX something

a if you XXX XXX, wells So, eight years. seven, I go that's year, mean to

William J. Way

two that obviously Of well. as and balance other have testing and which the then we're optimizing; benches through and (XX:XX) inventory, you so opportunity you exploring that just

John H. Abbott

years that's laterals So of seven to Southwest that is in Appalachia, eight X,XXX-foot or feet? X,XXX

Clayton A. Carrell

that's the on Well, a longer that. it. probably the put we're why I to I it's laterals, mean, lower of going end range if on

John H. Abbott

right. All

Clayton A. Carrell

to that them is our be And out make to will figure longer. objective, ways

John H. Abbott

a around that Southwest inventory. be to have That's Utica very helpful. Appalachia, at provide of that curve? do sort to Street is And related a mean, you might you deep must the I then inventory also with the When confidence think of mean, you able some (XX:XX). type $X.XX to still lot I related

William J. Way

the and we be And done and what further next plan. get year data program for well answer that next question. And we've Utica, in build on trades plan for to a opportunity pathway. positive And knowledge find we'll been land get to know, able what kind pretty Right digesting done. then a see we've to once to we of the that yet, we're we're data capturing a are a amount we haven't wells of a we able significant year. what put program, for they're about information now to drilling by once But in that those we we're We drilling studying well them we'll our need can out, traded drilled, seeing.

costs We doing have to reduce as well some work. we're well, seismic and

we So need do, to work. complete seismic the

we very to the study benefit West And our well. is methodical the us areas as Upper learn of and of while inventory great and approach. a Virginia The provide abundance Devonian so it this in liquid-rich

John H. Abbott

very on good much, a you Thank quarter. guys,

William J. Way

Thank you.

Operator

Thank you. for allotted reached gentlemen, end and questions. time of have we our the Ladies

the So back closing turn over to conference I Bill remarks. for like to would any Way

William J. Way

for everybody, thanks, call today. Well, joining our

As results, results we've to our our long-term see shareholder of can and supporting commitment value. had, impressive to highly releases all teams from deliver you talented continue drive the the

part again deliver are to the our you the U.S. driving even reposition we unlock forward liquid the from we're joining of greater We every talk deliver of look quartile company call that next top our to to as going pieces results. We company. about more value we forward this opportunities on as company many forward. shale business, And on rich the continue in we focused performance to investment time

call for great the weekend. joining thanks a Have today. So,

Operator

you, Thank thank The conference sir. concluded. has for presentation. now you And attending today's

You now may disconnect.

Southwestern Energy (SWN) 3 Aug 182018 Q2 Earnings call transcript